Avila is a beautiful, very historic city. This is a great place to use as home base to travel out to other cities and sites of interest. Most are 1-1.5 hours away including Madrid. Fridays there is an open air market in the plaza. For a beautiful and enchanting evening, walk the top of the wall at night.
It is one of the few Medieval European cities with the wall intact. (turrets, 6 door-entrance, and miles of wall). It is a beautiful city with a lot of history on every street. The cathedral alone is worth the trip from Madrid (only 90 minutes).
Avila is a beautiful city. I went to Avila to visit the sites of St. Theresa of Avila (aka. Theresa of Jesus). I took a train from Madrid to Avila. It was a beautiful train ride. There is a lot to see in Avila, especially if you are interested in St. Theresa. If you are on a tight budget, then Avila should not be a problem. One suggestion: If you need to exchange money, do it before you get to Avila. They charge a high fee! Avila is awesome!